Are Multinational Corporations (MNCs) agents of development or exploitative predators?

Chapter 9 presents several central tenets of liberal economics: free trade, absolute/comparative advantage, and globalization. These ideas are particularly important in today’s world, with the increasing power and appeal of market capitalism and the forces of globalization. One key element is the increasing role and impact of multinational corporations (MNCs). In this exercise, you will consider the nature of globalization and the role of MNCs in it.

Cynthia Notariffs, a prominent member of the business community in your home state, believes that the investment, trade, and growth generated by MNCs are essential to progress and prosperity for countries in the North and the South. This business leader argues that MNCs have generated wealth and reduced poverty around the world while helping to expand markets and increase interdependence. As an expert on international affairs, you have been invited by a local university to comment on Ms. Notariffs’s argument, either by supporting or by opposing it. The university promises to publish your comments in its campus newspaper.

Your task is to write a clear, concise response containing at least three reasons to support or oppose Ms. Notariffs’s argument; your response must be suitable for publication in the campus newspaper as an Op-Ed piece. Since your audience will be the general university community and local townspeople, don't use technical, statistical, or political science terms unless you clearly define them.

I. Concepts. Review free trade, absolute/comparative advantage, and globalization, as well as the discussion of the nature and impact of MNCs. You might begin by examining the following two Web sites, which provide information about the relative economic might of multinational corporations:

www.globalpolicy.org/socecon/tncs/tncstat2.htm
www.globalpolicy.org/socecon/tables/tncs/100large.htm

II. Finding the Evidence. Gather information from both pro- and anti-free trade (or globalization) organizations and resources at www.uiowa.edu/ifdebook/features/links/globalization.shtml.

On the linked pages, you can find information about the effects of globalization and MNCs on the following economic and social factors. C hoose at least four of these factors and find evidence about the impact of MNCs.

• aggregate economic activity (e.g., GDP)
• efficiency in the production of goods
• employment of women
• environmental health and levels of pollution
• income gap between wealthy and poor residents
• legality and use of child labor
• overall poverty or income levels
• prices of necessary goods or services, such as food, housing, and health care
• unemployment
• worker rights and safety
• Citing the sources you used, summarize the evidence you find for each of your chosen factors.
• Based on the four factors that you have analyzed, provide a preliminary answer to the question of whether MNCs are agents of development or exploitative predators. If some factors are improved by MNCs and others are not, coming up with your answer will involve deciding which factors are more important and should therefore be given greater weight in the decision.

IV. Prepare Your Op-Ed Essay